The Ministry of Finance has proposed imposing a new tax on people who own property worth VNĐ700 million ($31,000) or more. - Photo vneconomy.vn The Ministry of Finance claims that the 0.4 per cent tax would bring in VNĐ31 trillion ($1.3 billion) per year and help Việt Nam “get in line with regulations on property tax rates in other countries.” But does that get it line with the people? Not likely. Currently, there is no tax on owning a house. Land users must pay an annual non-agriculture land use tax at a progressive rate of 0.03 per cent to 0.15 per cent of the land price per square metre, determined by the state every five years. The proposal means house owners will have to pay a new kind of tax for their house, apart from the land use tax they’re paying now. The finance ministry justified this new tax by saying that data from other countries show that the lowest property tax rate stands at 0.2 per cent, which makes Việt Nam’s tax rate … [Read more...] about Effective spending required for people’s acceptance of new property tax proposal
Why should we pay tax to the government
Transfer pricing claimed to partly cause FIE losses
Mong Binh - The Saigon Times Daily “Our statistics showed over 60% of the FIEs in the city posted losses last year,” Huong said in response to a question about the reasons why many FIEs have been making for years while Vietnamese firms of same sizes have been profitable at home and abroad. The global economic downturn, Huong said, made life tougher for businesses in Vietnam in 2009, leading many of them to fall into the red. The Vietnamese Government took action by providing businesses with tax breaks and deferral to help them out of tough times. But some multinationals are believed to take advantage of transfer pricing as an illegitimate and immoral means to shift their revenues and profits to the markets where taxes are lower than in Vietnam. Huong claimed a number of FIEs imported machines and materials from the parent company at high prices but sold the finished products they produced in Vietnam at prices lower than normal market levels. “So their losses are … [Read more...] about Transfer pricing claimed to partly cause FIE losses
Drastic Solution to Land Speculation
“The land issue is the hottest and most sensitive area; therefore, it is given priority to be settled first,” said Mr Nguyen Minh Quang, Minister of Natural Resources and Environment of Vietnam, at the press meeting on August 23. In response to reporters’ questions about goals and plans for its next term, Minister Nguyen Minh Quang said, with his determination, he will direct the functional units of the resources sector to implement various strong measures to minimize negatives in the land and resources areas. Your predecessor had so many efforts to curb negatives in the land area but it seems the results have not been as good as it was expected. So, the next term, do you continue to give priority in resolving this issue?We consider land issue the hottest and most sensitive area; therefore, it is given priority to be settled first.Currently, claims on land, wasteful use and speculation and corruption in land are still happening, which makes the public unsatisfied. … [Read more...] about Drastic Solution to Land Speculation
The use and abuse of tax havens
Where are the tax havens?Countries, states or territories mentioned in the Panama Papers are often considered “tax havens”. However, tax havens exist not only in faraway autonomous territories like Bermuda, the British Virgin Islands, the Cayman Islands, Hong Kong, and Macau; but also in developed countries such as Delaware and Puerto Rico (the US), Jersey and Isle of Man (the UK), Switzerland, Netherlands, and Luxembourg. Even Singapore is included in this list.There are currently 50 countries, states, or territories that are regarded as tax havens, depending on different definitions. These places do not impose any taxes, or very few taxes, on companies that are registered there. Even firms with no business activity in the country or who earn their main income from outside the country can avail. Other terms and conditions may apply but firms registered in Panama can always maximise the benefits from these tax reductions. Tax havens and SPVsMost “tax havens” … [Read more...] about The use and abuse of tax havens
Why Vietnamese enterprises always wait for the state’s assistance
The latest report of the World Bank and the World Economic Forum said that the competitiveness of Vietnamese enterprises has fallen behind Laos and Cambodia. The story of access to information and preparation for the ASEAN Economic Community partly explains that fact. VietNamNet talks with expert Pham Chi Lan, former vice chairwoman of the Vietnam Chamber of Commerce and Industry (VCCI), and Mr. Dau Anh Tuan, Head of VCCI’s Legal Department.VietNamNet: The fact that Mr. Dau Anh Tuan mentioned is alarming because according to recent information, about 10,000 small and medium sized enterprises from Thailand and Singapore and many other ASEAN countries came to Vietnam to learn about the Vietnamese market. And they did not wait until the AEC went into effect to prepare selling skills and their goods to compete with Vietnamese businesses. Meanwhile, most Vietnamese enterprises, which are mainly small and medium ones, will face direct competition from them. Why are ASEAN … [Read more...] about Why Vietnamese enterprises always wait for the state’s assistance
Government targets business environment, competitiveness
Central Institute for Economic Management Director Nguyen Dinh Cung spoke to Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) about progress on commerce reforms.The Government has amended Resolution 19 on key tasks and measures to improve the country's business environment and competitive advantages twice in the past two years. Will you please explain why?The fact the resolution has been updated twice is an indication of how the Government views the imperative need to improve the nation's business environment and comparative advantages.Objectives laid down in Resolution 19/ 2015 were more ambitious than those written in Resolution 19/2014.In the 2014 Resolution, our objective was to be ranked 6th among the 10 ASEAN member countries in terms of our business environment by the World Bank. In the 2015 document, we want to be ranked 4th place in ASEAN.This is a strong indication of the Government's determination to improve the nation's business environment. Many countries in the world … [Read more...] about Government targets business environment, competitiveness
Foreigners should arrange their own social insurance
Last week, Viet Nam News asked readers what they thought the pros and cons would be if foreigners working in Viet Nam were included in the country's social and health insurance programme. We also asked if they thought it would be feasible given the complex nature and differences between other countries and Viet Nam's health insurance policies. Alex Jameson, Canadian Our state health care insurance is provided to all of our teachers, part-time or full-time. They are registered at Thu Cuc hospital. It's insurance for outpatient services only, the small stuff like ear infections. We have additional coverage through liberty insurance for emergencies, and we send people to the French hospital. Not sure how new law changes anything. John Haywood, CanadianThis proposal is something most countries already have (at least those I have lived in) but I doubt it would work in Viet Nam. Your average Vietnamese wage can't support the extra loss in take home pay. Foreigners working here legally … [Read more...] about Foreigners should arrange their own social insurance
Lower basin residents endangered by unscrupulous resevoir owners
Discharging water from reservoirs during floods is usual for hydro-power plants. Dr Le Bac Huynh, from the Association of Conservation of Nature and Environment, told Khoa hoc va Doi song newspaper that this must be done safely. How many hours following the issue of a public notification can a hydro power plant start discharging water?It depends on the size of the hydro-power plant and its impact on people living in the lower basin. But in reality none of the Vietnamese hydro power plants have followed standard procedures. They do inform the public about their plans to discharge water, but only one or two hours before. With short notice, how can people move their property to a safer place? Sometimes they barely have time to move themselves.Why don't the authorities follow standard procedures? It doesn't cost them anything to do so.There are hundreds of reasons, both objective and subjective. They think they have the right to make their own rules, despite the fact that under the law … [Read more...] about Lower basin residents endangered by unscrupulous resevoir owners
Should imported vehicles remain tax free for expats?
Last week, Viet Nam News asked readers whether they think the country should continue allowing imported cars and motorbikes to enter the country as expatriate assets. Currently, every expatriate bringing a car back to the country is exempt from both import tax and the VAT. Here are some responses. Andrew Burden, Canadian, Ha Noi As long as a Viet Kieu (overseas Vietnamese)-imported car can pass a roadworthy safety test, I see no reason why it should not be imported, providing the owner can demonstrate legal ownership. As Viet Nam continues growing its economy with foreign direct investment and encourages tourism via Southeast Asian visa integration, why not bring more hard currency and cold-hard steel in the form of consumer goods? Tax the car, register the car and insure the car. The return of overseas Vietnamese brings in a whole new set of concerns and potential conflict. You need to be careful not to swamp the local market, but if richer, more independent and … [Read more...] about Should imported vehicles remain tax free for expats?
Firms must adapt to the market
Nguyen Dinh Cung, deputy director of the Central Institute for Economic Management, spoke with Tuoi Tre (Youth) about the request by the national coal group to reduce taxes on exported coal. The Viet Nam National Coal–Mineral Industries Holding Group (Vinacomin) has recently claimed that the group will suffer if the export tax is not reduced from 20 per cent to 10 per cent. Besides, around 20,000 workers might lose their jobs. What do you think? Solving the group's losses should not be the responsibility of the Prime Minister nor any other government official. The group's management board and its CEO need to recognize that taxes and fees are necessary parts of the business environment that they have to adapt to. It is normal for a group to complain. They know what the Government and local authorities are concerned about so they can take advantage of those issues to put pressure on them. Ensuring a stable job for labourers is the enterprise's responsibility as the enterprise … [Read more...] about Firms must adapt to the market